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Political Economy and Tourism Development

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    Political Economy and Tourism Development

    By group 2: Salah Nashawati, Aton Yoseph, Yoni Dob and Maurice Koopmans



    This article is going to illustrate how political and economic developments interact with tourism. Different theories which all affect the progress of tourism development have evolved over time, and relationships between political and economic powers that are present within in country. However, what does development mean and how does it come into play with economical politics?


    What is development? Development can be described as a process of developing or being developed. A good example of a development of the western world is the industrialisation. In this time the western world was progressing towards new inventions and better means of living. It can be argued that this was a big development for the western world. This development meant a rise in the economic power in the western countries after the indoctrination. A big step towards development in the economy was measured by mass production and mass consumption, which later on would change into a more service focused economy.

    Development and tourism:

    Tourism as an industry passed through several decades during the history, each decade formed the concept of tourism depending on the theories that were ruling the governments. In the 1960s tourism was fundamentally related with economic development as a part of modernisation process which considered as a decade of developing the rural transformation of traditional societies. In addition to be a smokeless industry that creates employment and increases the GDP for the countries. Subsequently in 1970s the results of the tourism benefits on the economic, environment, social and culture in the destinations were disappointed in due to the higher economic leakages.  In addition to the lower multiplier effects and the commodification that occurred on the cultures.  A new type of plantation economy that what economists called the tourism industry in the 1980s and 1990s, emphasis the tourism is an element key for the market and the free trade which based on the liberalising of the national economics to allow foreign investments. Hence, the emergences of finding an alternative paradigm like ecotourism and sustainable tourism to take a place in resolving the problems which occurred before an urgent need (Tefler, 2002).

    Alternative and sustainable development

    When one is referring to alternative development focus upon the people and the natural environment is of importance. Rather than from ’top down’ the focus of the alternative paradigm lies on planning from the ’bottom up’ and recognizing that there are other variables in the quality of life than purely the economic. Aiming on placing emphasis on the human personality’s development and fulfilling basic human needs is a different approach to development. Conservation of ecosystems and natural resources are also to factors put emphasis on by the alternative paradigm. The linking of these factors with human development leads to ’sustainable development’, a concept where the increased awareness of environmental problems shows that development and the environment are linked relentlessly. According to this approach it is not possible for development to take place upon a resource base which is deteriorating. The bottom-up approach is also highlighted by involving local communities in sustainable development strategies on a national level e.g.. The term ’sustainable development’ is is seen as a process of change and has been widely used by both governments and nongovernmental organizations as well as in the private sector within the last 25 years. Disagreement between stakeholders is often an effect of questioning what the goals of sustainable development are, and this is an issue. Different political opinions are an result of this and thus also different ways of approaching and achieving the goal. Much of the debate about on the interpretation of sustainable development is therefore due to the political tension underlying these issues (Holden, ibid.).


    The Oxford dictionary says; “the process of adapting something to modern needs”. This is a part of development. The political economic powers had to change accordingly to the needs of the population. Modernisation plays a part in the development of the western countries. As when the western countries benefited from the indoctrination the needs changed with it. These needs needed to be met and so mass production and mass consumption formed. These two factors are the last stage of the economic growth.

    Modernisation involves investing in capital, creating entrepreneurial skills and new technical knowledge.

    Rostow’s (1960) model describes the 5 stages of economic growth that countries pass through whiles in a developing time.

    Ø  Stage 1: Pre-industrial time with poor communications and outdated technology. There is a hierarchy present in the social structure of the society.

    Ø  Stage 2: Ideas are generated towards a new economic structure through increased trade.

    Ø  Stage 3: Industrialisation replaces the agricultural as the main form of work in the economy. Agriculture becomes more commercialised and becomes more productive due to technological advancements.

    Ø  Stage 4: Technology starts to spread towards all fields of economy and most of the investments are into the new industries.

    Ø  Stage 5: A mature economy with mass manufacturing and mass consumption. The economy will slowly shift towards a service economy.

    These stages will show what a developing country will go through on economical basis. For example in the United States stage 5 was reached at the point of which the motor car was being mass produced and consumed (Rostow, W. 1971).

    Dependency theory:

    Is the notion that resources flow from a "periphery" of underdeveloped states to a "core" of wealthy states, established as an alternative view of modernisation theory .Basically it is controlled by developed countries such as US and western countries toweaken those underdeveloped  countries on purpose in order to import from them the sources which are regarded as important to their economy  but in cheap prices  and in turn provided the underdeveloped countries markets for manufactured goods. The influence which led to this theory was by colonisation period which impose that by military forces and then collaborating with the rolling elites in those countries to control the markets even by military forces. The rolling elites are generally colonial governments working hand by hand with the developed countries to bring them as much benefits as they can from the counties that they govern, besides being under capitalism mind-set more than socialism in rolling the county.

    Economic neoliberalism

    In the 1970s and 1980s ideas of economic neoliberalism arose and were counter-revolutionary to the state and government interventions which much of the twentieth century had characterized. In this theory the free market is seen as superior to the government or any other form of political control. The best examples of the theory’s establishment are ’Reaganism’ and ’Thatcherism’, who together formed a part of a right ideological project based on free markets and privatization (Heywood, 2003). Although economic growth and investment is highlighted by the theory the downside of neoliberalism, when referring to tourism, can be caused through the reduction of a state’s influence on the economy, which leads to the removal of protective measures on industries such as tourism. Trickle-down growth is a part of neoliberalism with the economic rationale that major investments on the supply side and benefits for businesses will create economic benefits for the whole economy, after growth is the rest of society is created through different multiplier effects. All segments and classes of society will in that case be affected by the economic benefits, which initially were created at the top of society (Holden, ibid.).

    Application of sustainability in tourism

    There are several ways to define sustainable tourism. Sustainable tourism itself can be defined as if you visit a certain destination as a tourist and focus on making only positive impacts on for ex. The nature and environment, the local society and the economy. At the same time all the negative impacts are intending to be avoided. With other words the tourism industry and the host community together with the tourist itself take their own responsibility of the tourism activity.

    The sustainability within the tourism sector has been applied on widely different basis, though many different operators on the market are able to influence. Projects that run towards sustainability within the tourism sector can be governed both on a governmental or national level as well as it could be managed within the local community itself. Everything that is mentioned makes it even easier for private sector operators and other organizations to participate in sustainable work and projects, which has been the case in the last few decades. Nowadays it is more common to find partnerships that are linked between different sectors, to achieve a more sustainable managing in order to increase the numbers of visitors. 

    Protest against governmental managing of sustainability have appeared, though the local people often feel excluded from the decision making process. An including of local community can be of importance both for democratically principals, but also for raising awareness among the locals upon the destination (Holden, A., 2005).

    Pro-poor tourism/ sustainable tourism – eliminating poverty

    Tourism itself can actually be used as a source of combatting poverty.  This is something that is getting more widely common in underdeveloped countries, where a high rate of the population suffer from poverty. This is a new sight of sustainability, though we usually can discover how the developing countries are making profit out of the underdeveloped countries.  The overuse of resources upon tourist destinations could be a result of this.

     Pre-poor tourism is well known as a side of tourism that benefits the poor communities. The emphasis is upon including local people in tourism. If the locals at the destination can achieve a direct contact with the tourists, it will benefit them directly. If these destinations will be able benefit their communities it is necessary that they can act indipendant. Not being dependent on countries in the west or on tour operators, will automatically help the society to grow itself. The poor areas are in need of resources to able to participate in tourism activities and host the tourists themselves, which opens up a door also for local private operators at this stage. 

    Though the tourism sector can employ a huge amount of people during the high seasons, there are many opportunities to hire local labor at developing destinations. The biggest struggle today is that locals are being excluded from those opportunities because of foreign investors and tour operators as an example. If people that are living in areas suffering from poverty could be able to participate in economic activity such as planning and management, there would be an economic growth within certain local communities. (Holden, A., 2005).


    Telfer, D. (2002) ‘Tourism development’ in Sharpley, R. and Telfer, D. (eds) Tourism and Development: Concepts and Issues, Channel view Publications, Clevedon, 1-34.

    Holden, A. (2005) Tourism Studies and the Social Sciences. New York: Routledge

    Heywood, A. (2003). Political Ideologies: An Introduction, New York: Palgrave Macmillan

    Rostow, W. (1971) Stages of Economic Growth – A Non-Communist Manifesto, Cambridge: Cambridge University Press.

    Oxford University. (2015). Development. Oxford Dictionaries. Oxford University Press, n.d. Web. 28 October 2015.  

    Oxford University. (2015). Modernisation. Oxford Dictionaries. Oxford University Press, n.d. Web. 28 October 2015.

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